I am living in Romania, a central european country and I am trying to see a movie with an integrated subtitle . The problem is that the default video player does not display characters like 'ș', 'ț' even though I've tried all the central european encodings. Is there any fix for this?

This won't work for integrated subtitles so you can either choose to download Romanian subtitles and load them over the integrated subtitles or use ffdshow codec pack in Windows only to be able to change integrated subtitles default encoding to show Romanian diacritics.

To make sure Romanian diacritics are working 100% in Ubuntu, you should also install TrueType Microsoft fonts. Open a terminal window and type in:

sudo apt-get install ttf-mscorefonts-installer

and press YES when prompted to accept EULA for installing MS true fonts or these fonts won't be installed at all.

VLC player will be able to use most of these Microsoft fonts after you reboot the system. I recommend Comic Sans MS or Trebuchet MS or any other font that includes MS in its name. These fonts are compatible with Romanian diacritics, and especially 'ș', 'ț' as mentioned in your post.

So, it is important that you don't forget to also select an adequate font in VLC subtitles menu to make sure that your Romanian subtitles will work 100% in VLC player and also in any other video player with eastern european support for subtitles.